How Many Big Macs Can The World Eat?

Finally, how do we use that figure to estimate the total number of possible McDonald’s restaurants?

There are approximately 14,000 McDonald’s restaurants in the mature US market. That means there are roughly 47 restaurants per 1 MM people in the US. Applying that figure to the 900 MM estimate that we calculated, McDonald’s potential footprint outside the US would be 43,000.

However, we need to keep in mind that the appetite for McDonald’s and burgers in general outside the US is considerably less than what it is in the US. If we haircut our restaurants per capita estimate to 70%, we get a potential McDonald’s footprint outside the US of 30,000, which added to the 14,000 in the US gets you 44,000 total McDonald’s restaurants globally by 2019. This is 10,000 more restaurants than what McDonald’s has currently, translating to approximately 1,500 restaurants per year, a bit on the higher end given that they opened only 800 restaurants last year.

Assuming that they can ramp up construction to 1,000 restaurants per year, we would get 40,500 restaurants by 2019, 7,000 more than what they have currently. Maintaining the current franchised to company-owned ratio of 80%, there would be 32,400 franchise units and 8,100 company owned units by 2019.

Entering those values into our valuation tool gives us a Trefis price estimate of $105, or 15% above the current market price.

Risks and Next Steps

Our analysis depends on our assumptions about the ‘McDonald’s affordability’ cutoff, the world’s appetite for McDonald’s, and the number of restaurants McDonald’s can realistically build each year. Any meaningful variation in these admittedly rough assumptions would impact our analysis and valuation. For simplicity, we have also assumed that the number of customers per restaurant, average spend per customer and margins are the same in these geographies. In future articles we hope to dig deeper into some of these key assumptions. Stay tuned.

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